In The Hobbit, by J. R. R. Tolkien, Smaug was a greedy, reddish-gold dragon who laid waste to Dale and captured the Lonely Mountain and all its treasure. His scales were almost impregnable, but when Bilbo Baggins confronted Smaug in his lair, the hobbit discovered a bare patch on the dragon's underbelly. When Bilbo told his dwarf companions about Smaug's weakness he was overheard by the thrush that roosted by the mountain's secret door. The thrush in turn told Bard the Bowman of Esgaroth, and when Smaug later attacked Esgaroth Bard was able to slay Smaug with his Black Arrow.
Smaug is also the name of a Merc and Dikumud derived MUD online game program. Presumably the name comes from the Tolkien reference.